The country’s reserve bank claimed to be at the vanguard of a pivotal transformation in the evolution of money that will fundamentally alter the basic essence of money and its uses.
The Reserve Bank of India (RBI) has released a concept note for the launch of a central bank digital currency that is 50 pages long (CBDC). The RBI’s Fintech Department, which was established in January 2022 with the task of developing cryptocurrency rules and a central bank digital currency, has released its first report of this magnitude.
The RBI stated that it will soon begin a pilot of the digital rupee for particular use cases, although it did not provide a specific timeframe. The Indian Finance Minister Nirmala Sitharaman indicated earlier this year that a digital rupee would be released sometime in 2022 or 2023 using blockchain technology and other methods. And just last month, T Rabi Sankar, the deputy governor of the RBI, announced that a trial project for digital currencies will begin later this year.
The RBI stated in its concept note that the digital rupee will offer a different choice to the present forms of money. “It is substantially not different from banknotes, but being digital it is likely to be easier, faster and cheaper.”
The RBI has promoted its CBDC as a “risk free central bank digital money which will provide the users the same experience of dealing in currency in digital form, without any risks associated with private cryptocurrencies” while reiterating the risks of cryptocurrencies as a threat to the stability of the financial system.
The bank even went to the extent of declare that “the inherent design of cryptocurrencies is more geared to bypass the established and regulated intermediation and control arrangements that play a crucial role in ensuring integrity and stability of monetary and financial eco-system”
The RBI has insisted that prohibiting cryptocurrencies is the best course of action for India. Sankar claimed that CBDCs could “kill” any potential use cases for private cryptocurrencies in June 2022.